Journal entries to record the budget and the listed transactions and events

The city council of E. Staatsboro approved the following budget for the General Fund for fiscal year 2013:
Estimated Revenues
Property taxes.. $335,000
License fees… 40,000
Fines and penalties .15,000
Total revenues .$390,000
Appropriations
Salaries. $350,000
Supplies and utilities. 30,000
Debt service. 3,000
Total appropriations.. 383,000
Budgeted Increase in Fund Balance $ 7,000
The post-closing trial balance for the fund, as of December 31, 2012, was as follows:
Debits
Credits
Cash
$ 15,000
$ 8,000
Vouchers payable
7,000
Fund balance (unassigned)
$15,000
$15,000
The following transactions and events occurred during FY 2013:
1. Levied property taxes of $335,000 and mailed tax bills to property owners.
2. Borrowed $300,000 on tax anticipation notes at an interest rate of 1 percent per annum.
3. Ordered supplies expected to cost $18,000.
4. Received the supplies along with an invoice for $19,000; paid the invoice immediately.
5. Received cash ($383,000) from the following sources: property taxes ($330,000), licenses and fees ($38,000), fines and penalties ($15,000).
6. Paid cash for the following purposes: unpaid vouchers at the start of year ($8,000), salaries ($340,000), utility bills ($11,000).
7. Repaid the tax anticipation notes 6 months after the date of borrowing, with interest.
8. Processed a budgetary interchange, increasing the appropriation for supplies and utilities by $2,000 and reducing the appropriation for salaries by a like amount.
9. Will pay salaries for the last few days in December, amounting to $2,000, at the end of the first pay period in January 2014; also, received in early January 2014 a utilities invoice for $1,000 applicable to December 2013.
Use the preceding information to do the following.
a. Prepare journal entries to record the budget and the listed transactions and events.
b. Prepare a pre-closing trial balance.
c. Prepare a balance sheet; a statement of revenues, expenditures, and changes in fund balance.
d. Prepare closing journal entries.

Sample Answer

a. Journal Entries:

To record property taxes levied:
Debit: Property Taxes Receivable – Current Year $335,000
Credit: Revenues – Property Taxes $335,000

To record borrowing on tax anticipation notes:
Debit: Cash $300,000
Credit: Tax Anticipation Notes Payable $300,000

To record supplies ordered:
Debit: Supplies $18,000
Credit: Vouchers Payable $18,000

To record payment for supplies invoice:
Debit: Vouchers Payable $19,000
Credit: Cash $19,000

To record cash received:
Debit: Cash $383,000
Credit: Revenues – Property Taxes $330,000
Credit: Revenues – License Fees $38,000
Credit: Revenues – Fines and Penalties $15,000

To record cash payments:
Debit: Vouchers Payable $8,000
Debit: Salaries Expense $340,000
Debit: Supplies and Utilities Expense $11,000
Credit: Cash $359,000

To record repayment of tax anticipation notes with interest:
Debit: Tax Anticipation Notes Payable $300,000
Debit: Interest Expense $1,500
Credit: Cash $301,500

To record budgetary interchange:
Debit: Appropriations – Salaries $2,000
Credit: Appropriations – Supplies and Utilities $2,000

To record accrued salaries and utilities expense:
Debit: Salaries Expense $2,000
Debit: Utilities Expense $1,000
Credit: Accrued Salaries Payable $2,000
Credit: Accrued Utilities Payable $1,000

b. Pre-Closing Trial Balance:

Debits Credits

Cash $ 39,000 –
Vouchers Payable 7,000 –
Supplies 18,000 –
Tax Anticipation Notes Payable 300,000 –
Property Taxes Receivable 335,000 –
Accrued Salaries Payable 2,000 –
Accrued Utilities Payable 1,000 –
Fund Balance – Unassigned – 15,000

Total $702,000 $15,000

c. Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance:

Balance Sheet:
Assets:
Cash $39,000
Supplies 18,000
Property Taxes Receivable 335,000
Total Assets $392,000

Liabilities:
Vouchers Payable 7,000
Tax Anticipation Notes Payable 300,000
Accrued Salaries Payable 2,000
Accrued Utilities Payable 1,000
Total Liabilities 310,000

Net Assets:
Fund Balance – Unassigned 82,000
Total Liabilities and Net Assets $392,000

Statement of Revenues, Expenditures, and Changes in Fund Balance:

Revenues:
Property Taxes $330,000
License Fees 38,000
Fines and Penalties 15,000
Total Revenues 383,000

Expenditures:
Salaries 342,000
Supplies and Utilities 13,000
Debt Service 3,000
Total Expenditures 358,000

Excess (Deficiency) of Revenues Over (Under) Expenditures:
Excess of Revenues Over Expenditures 25,000

Other Financing Sources (Uses):
Transfer from Other Funds –
Total Other Financing Sources (Uses) –

Net Change in Fund Balance:
Net Change in Fund Balance 25,000

Beginning Fund Balance:
Fund Balance – Unassigned 15,000

Ending Fund Balance:
Fund Balance – Unassigned 40,000

d. Closing Journal Entries:

To close revenues to the fund balance:
Debit: Revenues – Property Taxes $330,000
Debit: Revenues – License Fees $38,000
Debit: Revenues – Fines and Penalties $15,000
Credit: Fund Balance – Unassigned $383,000

To close expenditures to the fund balance:
Debit: Fund Balance – Unassigned $358,000
Credit: Expenditures – Salaries $342,000
Credit: Expenditures – Supplies and Utilities $13,000
Credit: Expenditures – Debt Service $3,000

This question has been answered.

Get Answer

Subject:
Type:
Pages/Words:
	Single spaced
	approx 275 words per page
Urgency:
Level:
Currency:
Total Cost:

No More Worries!

Paper Formatting

No Lateness!

AEW Guarantees

Journal entries to record the budget and the listed transactions and events

Sample Answer

This question has been answered.

Compute Cost of Paper

Our Services

Why Choose Us